Entrepreneurship and the Informal Economy: A Study of Ukraine’s Hidden Enterprise Culture

Journal of Developmental Entrepreneurship, Vol. 12, No. 1 (2007) 119-136

18 Pages Posted: 27 Dec 2015

See all articles by Colin Williams

Colin Williams

University of Sheffield - School of Management

John Round

University of Birmingham

Date Written: 2007

Abstract

How many entrepreneurs start-up their business ventures conducting some or all of their trade in the informal economy? The aim of this paper is to answer this key question that has been seldom addressed using data from 600 face-to-face structured interviews conducted in Ukraine in late 2005 and early 2006. Analyzing the 331 entrepreneurs identified (i.e., individuals starting-up an enterprise in the past three years), just 10 percent operate on a wholly legitimate basis, while 39 percent have a license to trade and/or have registered their business but conduct a portion of their trade in the informal economy, and 51 percent operate unregistered enterprises and conduct all of their trade on an off-the-books basis. Given that some 90 percent of all business start-ups operate partially or wholly in the informal economy, and that 40 percent of all respondents depend on the informal economy as either their principal or secondary contributor to their livelihoods, the paper concludes by considering the wider implications of these findings both for further research and public policy.

Keywords: informal sector, entrepreneurship, underground economy, economic development, Ukraine, post-socialist societies

JEL Classification: H26, J46, J48, K34, K42, O17, P2, P3

Suggested Citation

Williams, Colin and Round, John, Entrepreneurship and the Informal Economy: A Study of Ukraine’s Hidden Enterprise Culture (2007). Journal of Developmental Entrepreneurship, Vol. 12, No. 1 (2007) 119-136, Available at SSRN: https://ssrn.com/abstract=2708402

Colin Williams (Contact Author)

University of Sheffield - School of Management ( email )

15 Conduit Road
Sheffield, S10 1FL
United Kingdom

HOME PAGE: http://https://www.sheffield.ac.uk/management/staff/williams/index

John Round

University of Birmingham ( email )

Edgbaston, Birmingham B15 2TT
United Kingdom

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